EURUSD traded higher this past week after testing the key 1.3400 support level. Earlier, the pair broke an important up-move trend line as plotted on the 4 hour chart shown below. The pair tested the same trend line earlier in the Asian session. This trend line might act as a resistance in the short to medium term. There is also a bearish hidden divergence on the 4 hour chart, which supports our bearish view. So, I think that every rally might present us a sell opportunity.
Looking at the 1 hour chart of EURUSD, the pair can climb higher again, and re-test the trend line and resistance as shown in the chart below. Once the pair moves higher, makes a stop at around the trend line and forms a bearish candle pattern, then we will jump into a sell trade. Remember, this trade is only valid until the pair is trading below the broken trend line.
Initial target should be around the last week’s low of 1.3400, and final target could be around the 1.3300 level. Stop should be triggered on 4 hour close above the broken trend line.
Major events scheduled in the upcoming week
This past week was an interesting one as the US dollar lost some gains against the Euro and pound, and gained some ground against the Australian and the New Zealand dollar. FOMC meeting minutes were released in the last week, which pointed a possibility of the QE taper if the incoming data for the US comes in line with the expectation. The inflation rate for the US remained stable and retail sales registered a healthy gain in October. EURUSD traded as low as 1.3400, and then climbed back to regain the 1.3500 level. GBPUSD traded above the 1.6200 figure again. There was some good news from the Euro zone, as German manufacturing PMI, services PMI and IFO business climate index showed a lot of improvements, which the Euro buyers enjoyed in the last week.
Let us look at all major events lined up in the upcoming week.
Sunday – BOJ Governor Kuroda’s speech.
Monday – Swiss employment level and US pending home sales data.
Tuesday – BOE Governor Mark Carney’s speech, US CB consumer confidence, building permits, housing starts data and New Zealand’s trade balance figures.
Wednesday – Gfk German consumer confidence, UK GDP, US core durable goods orders data, Chicago PMI and Michigan consumer sentiment.
Thursday – Swiss GDP, Spanish GDP, German employment data, Euro zone Business climate data, Euro zone consumer confidence data and Japan’s unemployment rate.
Friday – German retail sales data, French consumer spending, Euro zone inflation data, Canadian GDP and Euro zone’s employment data.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPUSD, EURGBP, USDJPY, EURJPY, GBPJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD, EURNZD, GOLD and INDICES.
Get it HERE: Vladimir’s Markets Forecast
Have a great week friends!
